The acquisition is an opportunity for Colorado-based Newmont to improve its mine life and costs at a time when the mining industry has been in a slump for nearly four years.

For South African-based AngloGold, the world’s third-biggest gold producer, the cash from the sale will help reduce its $3.1 billion debt pile and lower financing costs.

“This deal significantly de-risks the balance sheet without diluting our shareholders, and places us in a much stronger position,” Srinivasan Venkatakrishnan, AngloGold’s Chief Executive said in a statement.

In addition to the cash payment, AngloGold will also receive a net smelter royalty on future underground production at the mine.

Newmont will issue 29 million shares in a public offering to help fund the purchase.

Reuters reported last week that Newmont was in exclusive talks with AngloGold on the acquisition, citing two sources familiar with the matter.

“Consistent with what we’ve achieved elsewhere, we believe we can lower direct mining costs by up to 10 percent through improved productivity and optimization,” Gary Goldberg, Newmont’s CEO said in a statement.

An expansion of Cripple Creek is around two-thirds complete with the mine expected to produce between 350,000 and 400,000 ounces of gold a year in 2016 and 2017 at all-in sustaining costs of between $825 and $875 an ounce, Newmont said.

The sale means AngloGold will no longer have to fund the remaining capital of about $200 million required to finish Cripple Creek’s expansion.

Newmont said it planned to keep Cripple Creek’s workforce.

Large gold producers globally, including world No. 1 Barrick Gold Corp, are selling non-core assets as they try to reduce debt and slim down operations amid weaker gold prices.

Other players that had been vying for the Cripple Creek asset were Canadian gold miners IAMGOLD Corp, Kinross Gold Corp, Goldcorp Inc and Yamana Gold Inc .